World discovers a $1 trillion ocean as Arctic sea ice vanishes – ‘These changes are like nothing we have seen. We don’t have anything to compare with in history.’

Desdemona Despair

By Eric Roston
22 January 2016

(Bloomberg) – As chairman of investments at Guggenheim Partners, Scott Minerd thought he had a realistic view on how big an economic challenge climate change poses.

Then, at a Hoover Institution conference almost three years ago, he met former U.S. Secretary of State George Shultz. Minerd recalled him saying: “Scott, imagine that you woke up tomorrow morning, and the headline on the newspapers was, ‘The World Has Discovered a New Ocean.’” The opening of the Arctic, Shultz told him, may be one of the most important events since the end of the ice age, some 12,000 years ago.

And while Shultz’s spokesman couldn’t confirm the conversation, there’s no doubting the melting of the Arctic ice cap, and the unveiling of resources below, presents mind- boggling opportunities for energy, shipping, fishing, science, and military exploitation. Russia even planted its flag on the sea floor at the North Pole in 2007.

Energy and shipping have been first up. Norway made its national fortune drilling in northern waters, and Arctic fossil fuel exploration has become a more prominent part of U.S. energy policy. Melting ice means that in summer months, cargo can travel approximately 5,000 km from Korea to New York, rather than the 12,000 km it takes to pass through the Panama Canal. Warming waters also open up access to commercial fish stocks, making the Arctic a growing source of food.

Not long after that Hoover conference, Minerd joined a World Economic Forum advisory council. Its task? Develop guidelines for those nations looking to do business at the top of the world. That framework was released Thursday, in Davos.

“The history of economic development in regions of the world has really been fraught with a mass of mistakes,” said Minerd, who before Guggenheim worked at Credit Suisse and Morgan Stanley. “It really seems that someone needed to start developing a minimum standard, as a guide for economic development in the region.”

The Arctic Investment Protocol, developed by a 22-member WEF “global agenda council,” puts forward sustainability principles similar to initiatives developed for mature economies in recent years. The focus is long-term: tap the expertise of indigenous communities and treat them as commercial partners, protect ecosystems (even as rising temperatures change them before our eyes), and prevent corruption while encouraging international collaboration. The Arctic nations include Canada, Denmark, Finland, Iceland, Norway, Russia, Sweden and the U.S., so there is a lot of collaboration to be had. […]

Such an effort will require significant scientific observation, especially given how little data there is, and how few have ever lived north of 66 degrees. Jan-Gunnar Withner, director of the Norwegian Polar Institute and a member of the WEF group, said increases in shipping, mining or other natural resource harvesting will be at the mercy of a fast melting ice cap. The retreat of ice sheets has created a shifting seascape of shipping channels. Melting glaciers are spawning more pesky icebergs that can wreak havoc on container ships and drilling platforms.

The Arctic is warming faster than any other part of the globe, Winther says: “These changes are like nothing we have seen. We don’t have anything to compare with in history.” [more]

The world has discovered a $1 trillion ocean